<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
Commission file number 33-4001
CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
______________________________________________________________________
(Exact name of registrant as specified in its charter)
DELAWARE 43-1393535
______________________________________________________________________
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
201 Progress Parkway
Maryland Heights, Missouri 63043
______________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 515-2000
__________________
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports,
and (2) has been subject to such filing requirements for the past 90
days.
YES X NO
____ ____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date, April 30,
1997:
COMMON STOCK, $.01 Par Value - 1,000 Shares
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CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
INDEX
Page
Number
Part I.FINANCIAL INFORMATION
Item 1.Financial Statements
Balance Sheet ...........................................3
Statement of Operations .................................4
Statement of Changes in Stockholder's Equity ............5
Statement of Cash Flows .................................6
Notes to Financial Statements ...........................7
Item 2.Management's Discussion and Analysis of Financial
Condition and Results of Operations .....................8
Part II.OTHER INFORMATION......................................9
SIGNATURES.....................................................10
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CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
BALANCE SHEET
(Unaudited)
March 31, December 31,
1997 1996
ASSETS
CASH $ 43,762 $ 43,762
____________ __________
TOTAL ASSETS $ 43,762 $ 43,762
============ ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
PAYABLE TO EDWARD D. JONES & CO., L.P.$ 478,356 $ 478,356
ACCRUED EXPENSES 3,500 3,500
____________ _________
TOTAL LIABILITIES 481,856 481,856
____________ ________
Stockholder's Equity:
COMMON STOCK - $.01 par value, 1,000 shares
authorized, issued and outstanding 10 10
PAID-IN-CAPITAL 300,490 300,490
RETAINED DEFICIT (738,594) (738,594)
____________ _________
TOTAL STOCKHOLDER'S EQUITY (438,094) (438,094)
____________ _________
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $ 43,762 $ 43,762
============= =========
The accompanying notes are an integral part of these financial
statements.
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CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended
March 31, March 31,
1997 1996
REVENUES:
Residual interest in certificates $ - $ -
_______ ________
EXPENSES:
Registration, filing and other fees - 50
_______ ________
LOSS BEFORE INCOME TAXES - (50)
PROVISION FOR (BENEFIT FROM) INCOME
TAXES - -
________ ________
NET LOSS $ - $ (50)
======== ========
The accompanying notes are an integral part of these financial
statements.
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CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
(Unaudited)
Three Months Ended March 31, 1997 and 1996
Common Paid-In Retained
Stock Capital Deficit Total
BALANCE, DECEMBER 31, 1995$ 10 $ 300,490 $(748,488) $(447,988)
NET LOSS - - (50) (50)
_________ _________ __________ _________
BALANCE, MARCH 31, 1996 $ 10 $ 300,490 $(748,538) $ (448,038)
========= ========= ========== =========
BALANCE, DECEMBER 31, 1996$ 10 $ 300,490 $(738,594) $ (438,094)
NET INCOME (LOSS) - - - -
_________ ________ _________ _________
BALANCE, MARCH 31, 1997 $ 10 $ 300,490 $(738,594) $ (438,094)
========= ======== ========= =========
The accompanying notes are an integral part of these financial
statements.
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CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
1997 1996
CASH FLOWS PROVIDED BY OPERATING
ACTIVITIES:
Net loss $ - $ (50)
Adjustments to reconcile net income to net
cash provided by operating activities -
Increase in payable to Edward D. Jones
& Co., L.P. - 50
_______________ __________
Net cash provided (used) by operating
activities - -
______________ __________
Net increase (decrease) in cash - -
CASH, beginning of period 43,762 33,298
_______________ __________
CASH, end of period $ 43,762 33,298
=============== ==========
The accompanying notes are an integral part of these financial
statements.
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CORNERSTONE MORGAGE INVESTMENT GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
BASIS OF PRESENTATION
The financial information included herein is unaudited. However,
in the opinion of management, such information includes all
adjustments, consisting solely of normal recurring adjustments, which
are necessary for a fair presentation of the results of interim
operations. These interim results should be read in connection with
the annual Form 10-K.
The results of operations for the three months ended March 31,
1997, are not necessarily indicative of the results to be expected for
the full year.
FUTURE OPERATIONS
Cornerstone Mortgage Investment Group, Inc. (the "Company" or
"Cornerstone") was incorporated in the state of Delaware on January 9,
1986, as a wholly-owned, limited purpose subsidiary of Edward D. Jones
& Co., L.P. ("EDJ"), a Missouri limited partnership. EDJ organized
the Company and currently owns all the issued and outstanding capital
stock of the Company.
Cornerstone was organized for the limited purpose of issuing and
selling secured mortgage bonds (the "Bonds"), which are collateralized
by Government National Mortgage Association (GNMA), Federal Home Loan
Mortgage Corporation (FHLMC) and Federal National Mortgage Association
(FNMA) Certificates.
Due to revisions of the Internal Revenue Code enacted, effective
January 1, 1987, Cornerstone no longer issues bonds. Cornerstone will
continue operations until such time as the Bonds previously issued are
retired or mature.
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CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
MANAGEMENT'S FINANCIAL DISCUSSION
No residual interest in certificates was earned during the three
months ended March 31, 1997 and March 31, 1996. No series were issued
during these periods.
Expenses for the three months ended March 31, 1997 and March 31,
1996, were $0 and $50, respectively, and were for registration, filing
and other fees.
The outstanding principal balance and remaining collateral value
relating to series issued by Cornerstone Mortgage Investment Group,
Inc. are $5,925,000 and $5,935,890 as of March 31, 1997.
<PAGE>
CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
Item 1:Legal Proceedings:
There are no pending legal proceedings.
Item 2.Changes in Securities:
No change.
Item 3.Default upon Senior Securities:
No default.
Item 4.Submission of Matters to a Vote of Security Holders:
Nothing to report.
Item 5.Other Information:
Nothing to report.
Item 6:Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. Description of Exhibit
_________ __________________
4.1 Indenture dated as of June 15, 1986, between
the Company and Boatmen's Trust Company of St.
Louis, as Trustee, relating to Secured Mortgage
Bonds (incorporated by reference to Exhibit
4(a) to Registration Statement on Form S-1, as
amended, File No. 33-4001).
4.2 First Supplemental Indenture dated August 28,
1986 (incorporated by reference to Exhibit 1 to
the Current Report on Form 8-K filed on
September 19, 1986).
4.3 Second Supplemental Indenture dated September
26, 1986 (incorporated by reference to Exhibit
1 to the Current Report on Form 8-K filed on
October 6, 1986).
4.4 Third Supplemental Indenture dated October 31,
1986 (incorporated by reference to Exhibit 1 to
the Current Report on Form 8-K filed on
November 12, 1986).
(b) Reports on Form 8-K
No reports were filed on Form 8-K for the quarter ended March 31,
1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
(Registrant)
/s/John C. Heisler Chairman of the Board,
________________ Chief Financial Officer,
John C. Heisler Chief Accounting Officer
and Director May 8, 1997
/s/Philip R. Schwab President, Chief Executive
________________ Officer and Director May 8, 1997
Philip R. Schwab
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
(Registrant)
Chairman of the Board,
_______________ Chief Financial Officer,
John C. Heisler Chief Accounting Officer
and Director May 8, 1997
President, Chief Executive
_______________ Officer and Director May 8, 1997
Philip R. Schwab
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Cornerstone Mortgage Investment Group, Inc. for the
quarter ended March 31,1 997 and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<CIK> 0000790524
<NAME> CORNERSTONE MORTGAGE INVESTMENT GROUP, INC.
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<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
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0
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